Dasaradha Rami Reddy Somavarapu , Nellore V. Income Tax Officer, Ward-1, Nellore

ITA 1923/Hyd/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 6187 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-04-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 08-04-2021
• Assessment Year: 2010-2011
• Appeal Filed On: 30-12-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SUBRAMANYAM TOTA
• Assessee Lawyers: K P ANDURANGAIAH
• Keywords: Gross profit estimation; TDS
• Section: 143(3); 22

Judgement Text

ITA NO 1923 OF 2019 DASARADHA RAMI REDDY SOMAYARAP U NELLORE PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD SMC BENCH, HYDERABAD (THROUGH VIDEO CONFERENCING) BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER ITA NO.1923/HYD/2019 ASSESSMENT YEAR: 2010-11 SRI DASARADHA RAMI REDDY SOMAVARAPU, NELLORE PAN:ATXPS8564P VS. INCOME TAX OFFICER WARD-1 NELLORE (APPELLANT) (RESPONDENT) ASSESSEE BY: SRI K. PANDURANGAIAH REVENUE BY : SRI SUBRAMANYAM TOTA, DR DATE OF HEARING: 08/04/2021 DATE OF PRONOUNCEMENT: 22/04/2021 ORDER THIS IS ASSESSEES APPEAL FOR THE A.Y 2010-11 AGAIN ST THE ORDER OF THE CIT (A)-6, HYDERABAD, DATED 25/10 /2019. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IN DIVIDUAL, CARRYING ON CONTRACT BUSINESS, FILED HIS RETURN OF INCOME FOR THE A.Y 2010-11 ON 15.10.2010 ADMITTING A TOTAL INCOME OF RS.12.00 LAKHS. PURSUANT TO THE SELECTION OF RETURN OF INCOM E OF THE ASSESSEE FOR SCRUTINY THROUGH CASS TO EXAMINE VARIO US RECEIPTS OF CONTRACTORS BUSINESS , ASSESSMENT U/S 143(3) WAS TAKEN UP. 3. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER ASKED THE ASSESSEE TO PRODUCE THE BILLS/VOU CHERS FOR THE EXPENSES DEBITED TO THE P&L A/C, A COPY OF THE AGRE EMENT ENTERED INTO WITH THE PRINCIPAL CONTRACTOR AND THE TDS CERT IFICATES PERTAINING TO THE GROSS RECEIPTS ADMITTED. HOWEVER, THE ASSESSEE FAILED TO PRODUCE THE RELEVANT DOCUMENTS AND THEREF ORE, THE ITA NO 1923 OF 2019 DASARADHA RAMI REDDY SOMAYARAP U NELLORE PAGE 2 OF 4 ASSESSING OFFICER REJECTED THE BOOKS OF ACCOUNT OF THE ASSESSEE AND ESTIMATED THE PROFIT PERCENTAGE AT 8% OF GROSS RECEIPTS ON THE MAIN CONTRACTS AND 6% ON SUB-CONTRACTS. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT (A) WHO CONFIRME D THE ASSESSMENT OF PROFIT ON MAIN CONTRACT AT 8% AND INC OME FROM SUB-CONTRACTS AT 5%. AGAINST THIS ORDER OF THE CIT (A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISIN G THE FOLLOWING GROUNDS OF APPEAL: I. ESTIMATED NET INCOME AT 8% ON THE GROSS CONTRAC T BILLS RS.51,66,770/- WHICH WORKS OUT TO RS.4,13,337/-AS AGAINST ADMITTED INCOME OF RS.73,312/- CONSEQUENTIA L ADDITION OF INCOME RS.3,40,025/- DISPUTED TAX RS.L,02,039/- SAME UPHOLD BY THE C I T APPEALS (I) THE LEARNED COMMISSIONER OF INCOME TAX APPEALS TOTALLY MISCONSTRUED THE FACTS OF THE ENTIRE CASE WHILE UPH OLDING THE CONTENTION OF THE ASSESSING OFFICER. (II) THE HON'BLE CIT APPEALS HAS OVERLOOKED THE DET AILED SUBMISSIONS MADE IN THE COURSE OF SCRUTINY TO THE ASSISTANT COMMISSIONER ON 13-8-2012 (II) LATER ON C HANGE OF JURISDICTION TO THE INCOME TAX OFFICER WARD-1 NE LLORE ON 18-12-2012 (III) AFTER PREFERRING APPEAL IN THE COU RSE OF HEARING OF THE APPEAL SUBMISSIONS MADE BEFORE THE C L T APPEALS ALSO NOT LOOKED IN TO. BY MISCONSTRUING THE ENTIRE FACTS OF THE CASE THE ADDITION WAS UPHELD. THE ADDI TION MAY BE DELETED. II. AO ESTIMATED G.P AT 6% ON THE SUB CONTRACT BILLS- RS2.94.80.674/-.AS AGAINST ADMITTED GROSS PR OFIT OF 4.52% CONSEQUENTIAL ADDITION OF INCOME RS.5.59.8 91/- CL T CA) REDUCED THE GP ADDITION FROM 6% TO 5% ADDI TION SUSTAINED RS.1.82.250/- DISPUTED TAX RS. 54. 675/- (I) THE LEARNED CL T APPEALS WHO APPRECIATED THE REASONS FOR ADMITTING LOW GROSS PROFIT OF 4.52% VIZ., ALREADY TENDERED WORK ALLOTTED TO THE APPELLANT -ALL OF A SUDDEN THE WORK TO BE EXECUTED AT TWO DIFFERENT PLACES WAS REDUCED THE TENDER RATE BY THE CONTRACTEE SUO MOTU. (II) (II) TO ADD TO THIS CEMENT STEEL, METAL, SAND AND P ETROL DIESEL RATES, LABOUR CHARGES HAVE GONE UP. (III) THE APPELLANT FURTHER SUBMITS THAT THE ENTIRE EXPENDITURE IS VERIFIABLE DULY SUPPORTED BY BILLS A ND VOUCHERS. WITHOUT APPRECIATION OF THE BOOKS OF ACCO UNTS AND BY OVERLOOKING THE STATEMENTS FILED THE CIT APP EALS ITA NO 1923 OF 2019 DASARADHA RAMI REDDY SOMAYARAP U NELLORE PAGE 3 OF 4 HAS ALLEGED THAT THE EXPENDITURE IS NOT SUPPORTED B Y BILLS. NEITHER THE A 0 NOR THE CIT POINTED OUT WHICH EXPEN DITURE IS NOT SUPPORTED BY BILLS IN FACT THE ENTIRE EXPEND ITURE IS SUPPORTED BY BILLS. NO DEFECTS POINTED OUT. THE ADD ITION MAY BE DELETED. III ENHANCEMENT OF INCOME BY C I T APPEALS RS.1,80,311/- DISPUTED TAX RS.54,093/- :- THE COMMISSIONER OF INCOME TAX APPEALS IS NOT JUSTI FIED IN ENHANCING THE INCOME SUO MOTU BEING THE DIFFERENCE BETWEEN THE CONTRACT AMOUNT AND THE CONTRACT RECEIP TS. (8,19,022/- MINUS RS.6,38,691/PERTAINING TO THE ASSESSMENTYEAR2011-12. THE CL T APPEALS HAS NO STATUTORY POWER TO CONDUCT ANY ENQUIRY RELEVANT TO THE ASSESSMENT YEAR 2011-12 WHICH IS NOT IN DISPUTE BEF ORE THE CL T APPEALS. WITHOUT ESTABLISHING GUILT AND WI THOUT MAKING ENQUIRIES AND WITHOUT ISSUING SHOW-CAUSE NOT ICE. ADDITION MADE IS UNAUTHORIZED ADDITION MAY BE SET A SIDE. FOR THESE AND OTHER REASONS AS MAY BE URGED AT THE TIME OF HEARING OF THE APPEAL THE ADDITION MADE UNDER DI FFERENT HEADS MAY BE DELETED. 3. AS REGARDS GROUNDS 1 & 2 AGAINST THE ESTIMATION OF INCOME AT 8% ON MAIN CONTRACTS AND 5% ON SUB-CONTRA CTS, I DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDERS OF THE CIT (A) AS THE CIT(A) HAS FOLLOWED THE PRECEDENTS ON THE ISSUE I.E. THE DECISIONS OF THE TRIBUNAL WHICH HE HAS QUOTED IN HI S ORDER. THEREFORE, GROUNDS 1 AND 2 ARE REJECTED. 4. AS REGARDS ENHANCEMENT OF THE INCOME BY THE CIT (A) TO THE EXTENT OF 6,38,691/- IS CONCERNED ALSO, I FI ND THAT THE CIT (A) HAS DIRECTED THE ASSESSING OFFICER TO VERIFY WH ETHER THE SAID AMOUNT DISCLOSED BY THE ASSESSEE IN THE SUBSEQUENT A.Y 2011-12 RELATE TO THE CONTRACT AMOUNT RECEIVED IN THE A.Y 2 010-11 AND THEREAFTER, IN THE EVENT OF ASSESSEES FAILURE TO E STABLISH A DIRECT NEXUS ONLY, TO ENHANCE THE AMOUNT TO THE EXTENT OF RS.6,38,691/. THEREFORE, I DO NOT SEE ANY REASON TO INTERFERE WIT H THIS DIRECTION OF THE CIT (A). ITA NO 1923 OF 2019 DASARADHA RAMI REDDY SOMAYARAP U NELLORE PAGE 4 OF 4 5. IN THE RESULT, ASSESSEES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND APRIL, 2021. SD/- (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 22 ND APRIL, 2021. VINODAN/SPS COPY TO: S.NO ADDRESSES 1 SRI DASARADHARAMI REDDY SOMAVARAPU, D.NO.27 - 2 - 1065, A.C NAGAR, NELLORE 524004, A.P 2 INCOME TAX OFFICER WARD-1 NELLORE 3 CIT (A) - 6, HYDERABAD 4 PR. CIT - TIRUPATHI 5 DR, ITAT HYDERABAD BENCHES 6 GUARD FILE BY ORDER